Editorial: ECOT’s no good, really bad week

Monday

Aug 7, 2017 at 12:01 AM

Columbus Dispatch Editorial

Ohio’s big online charter school — accused of being a massive taxpayer ripoff — has had a really rough week.

On July 30, The Dispatch traced the story of how Bill Lager, a bankrupt office-supplier, cooked up the lucrative operation that became the Electronic Classroom of Tomorrow. He’d literally sketched out the business plan on the back of napkins at a Waffle House — where he was filching free cups of coffee, having photocopied a discount card.

From 2001 to 2016, ECOT reaped more than $1 billion from Ohio taxpayers. Of that, it paid associated Lager-owned companies more than $170 million. Today, he owns luxury homes in Ohio and Key West, Florida, all presumably equipped with decent coffee machines.

But it was the "back of the napkin" reference that caught our eye. (Dispatch reporter Catherine Candisky saw pictures of the napkins.) The phrase "This wasn’t written on the back of a napkin" is shorthand in executive circles for meaning "We didn’t come up with some cockamamie scheme. We did research. We consulted experts. This will work."

The phrase was used at a 2012 Hilliard Planning and Zoning Commission, where a massive development was debated. "I feel like we’re making this up on the back of a napkin," commission member Kirk Herath complained.

And the words cropped up in a 2011 statement from Ohio Gov. John Kasich defending state efforts to properly regulate the ownership of wild animals. (A man had released his dangerous menagerie before committing suicide.) "We will seek statutory authority," the governor vowed. "You don’t do it on the back of a napkin."

ECOT’s founding documents explain a lot. The operation is in trouble with the state for failing to document whether students were actually logging on to get an education, making its state student reimbursements questionable. A Waffle House waitress who later worked for Lager for 16 years, Chandra Filichia, remembers him saying, "It’s not about the (expletive) kids, Chandra; it’ s about the money."

With the Sunday story, Lager’s terrible week was just getting started.

ECOT got hammered again on Tuesday, when a letter was released from state Superintendent Paolo DeMaria agreeing with state Auditor Dave Yost to cut more of ECOT’s funding, holding back $12.4 million for services ECOT says are being provided this year. That’s because ECOT is still billing the state for high enrollments — despite its own admissions to a court and at board meetings that it has lost a significant number of students.

The deductions come on top $60 million that the state is subtracting from its payments to ECOT over the next two years, for failing to verify about 60 percent of its enrollment for which it was paid in the audited 2015-16 school year.

Another kick in the teeth came on Thursday, when it was reported the Ohio Republican Party is returning $76,000 in campaign donations from Lager and a top associate. This followed a decision by former House Speaker Larry Householder, who is seeking his old job, to return $70,000 to the Summit County Republican Party — the same amount the county party had received two weeks earlier from the state GOP. It looks like Lager’s money was funneled and then refunded.

Householder is no stranger to fundraising scandal; reported strong-arm tactics got him into trouble in the legislature in the early 2000s. If Householder won’t touch a dollar, that says a lot.